Honda Makes Its First Annual Loss in 70 Years

Japanese carmaker Honda has reported its first annual loss in 70 years after its heavy investments in electric vehicles (EVs) failed to deliver the expected returns. For the financial year ending March 2026, the company posted an operating loss of ¥423bn, as global demand for EVs grew more slowly than forecast. Honda said it would cancel some EV production targets, source cheaper components from China, and scale back its long-term electrification goals.
The company also pointed to policy changes in the United States as a major factor behind its losses, including the removal of tax credits for EV buyers and the introduction of tariffs on imported cars and parts. Analysts described the loss as a bleak but predictable milestone for a large, legacy automaker struggling to adapt quickly to volatile EV demand, political uncertainty, and strong competition from Chinese manufacturers. Honda now plans to focus on its profitable motorcycle business, hybrid vehicles, and financial services, while prioritising growth in North America, Japan, and India.